Chapter 1

Executive summary
Elements of Tunisia's success analyzes the areas expressed by the government as being
strategic for Tunisia's future: achieving higher rates of
In the mid-1980s, Tunisia made the strategic choice to growth in the context of sustainable environmental manbecome
a modem, market-oriented, and internationally agement and the enhanced competitiveness of the econintegrated
economy. Tunisia's macroeconomic performance omy in the global market. In addition, the report includes
since introducing stabilization and structural adjustment key issues raised by other groups in Tunisia (the private
reforms in 1986 has been impressive. The per capita GDP sector and members of the academic community) on the
growth rate increased significantly from an average of 1.15 role of the state in the economy, the development of the
percent a year for the period 1981-86 to 2.44 percent a year financial sector, and the adequacy of the education system
for the period 1987-94. The inflation rate (4.5 percent in in meeting the human capital requirements of the twenty-
1994) is approaching the average rate of the EU countries first century. Three key messages emerge from the analy-
(4.1 percent). The central-government primary balance has sis which can contribute to the country's strategy
been in a slight surplus since 1992, and the ratio of tax rev- formulation:
enues to GDP is higher than the respective averages for * The pace of structural reform needs to move forward
selected countries in the Latin American, Southeast Asian, more decisively, particularly in the areas of trade and investand
Middle Eastern regions. The current account deficit ment liberalization. Although the Tunisian economy has
averaged 4 percent of GDP during 1986-93, thus improv- become stronger and more sophisticated since the late
ingwith respect to the early 1980s when it averaged 8.5 per- 1980s, the external environment has not stood still. The
cent of GDP rest of the world is also changing rapidly, so that countries
The economy is also becoming more diversified and like Tunisia need to liberalize their economy with determimore
open, as manufactured output replaced the previous nation and in a timely manner to maintain their growth
dominance of oil and phosphate production and as the ratio prospects and enhance their international competitive
of nonpetroleum and nonphosphate exports to GDP position.
increased from 25 percent in the early 1980s to 35 percent * The state needs to decrease further its size and role in the
in the early 1990s. With the implementation of monetary economy, strengthen its actions in the provision of public
and financial sector reforms, Tunisia's financial market is goods, and encourage a higher level of private investmentdeepening
and the capital market is becoming very active domestic and foreign. Further disengagement of the state
(after more than twenty years of dormancy). At the same and the deregulation of public sector monopolies (for examtime,
the country has made impressive social advances over ple in telecommunications, maritime transport, and in the
the past decade: the incidence of poverty is low and declin- banking sector) and an acceleration of the privatization proing,
and income distribution is improving. The progress gram would promote productive and allocative efficiency in
achieved in the development of human capital, the reduc- the economy and enable the Government to focus on the
tion of the population's growth rate, and an increase in life enforcement of regulations that encourage profitable activexpectancy
are also highly commendable and are important ities, protect the public, and preserve the country's natural
ingredients for stronger growth. resources.
* Environmental constraints mean that furither adjust-
Strategic choices in the 1 990s ments in growth plans must take place, particularly in agriculture
and tourism. By undertaking the necessary
This report focuses on the policies that will influence the adjustments now, the Government will be in a better posifuture
growth and development of Tunisia. The report tion to implement these reforms gradually.
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